COMMISSIONER OF INCOME TAX, UDAIPUR vs M/S. VAISHALI ENTERPRISES — C.A. No. 4292/2000

Summary The Supreme Court allowed the Commissioner of Income Tax's appeal on 29 September 2005. Vaishali Enterprises, a cigarette wholesale dealer, had charged "on money" (premium) on cigarette sales and failed to explain unexplained credits in its accounts. The Assessing Officer imposed a penalty of Rs. 5,26,585 under Section 271(1)(C) of the Income Tax Act. The Income Tax Appellate Tribunal had reversed the penalty, reasoning the "on money" was charged at GPIL's instance and constituted business compulsion. The Court set aside the Tribunal's decision and confirmed the Commissioner's penalty order, holding that business compulsion does not exonerate the assessee from penal action. This case analysis is maintained by casestatus.in based on publicly available court records.